Saving v buy to let?

Archergirl

My sister has some money invested about £150K ish. She and her hubby are retired they are thinking of buying a flat to let out for about 100K.
Their money is invested in various things but not getting much interest and she is worried about losing it in a 'crash'. Is BTL a good idea?

bigadaj

Loads of discussion on here, people are generally averse to buy to let unless its a small part of a large portfolio.

It can be good but needs research and work, so more effort than many forms of investemnt.

quotememiserable

Do you know where you plan to buy, and what typical rental yield is there? So, for a £100k property how much annual rent will you collect. You need to take some off this for repairs and suchlike, and remember that the income will be taxable. Do this and you can see what return you'd get and if you think its going to be worth the effort.

kidmugsy

A BTL is illiquid and indivisible, and exposed to a crash anyway. Otherwise it's a grand idea.

Thrugelmir

Archergirl wrote: »

she is worried about losing it in a 'crash'.

Then a single property as a letting business isn't a good idea,

jimjames

Archergirl wrote: »

My sister has some money invested about £150K ish. She and her hubby are retired they are thinking of buying a flat to let out for about 100K.
Their money is invested in various things but not getting much interest and she is worried about losing it in a 'crash'. Is BTL a good idea?

With a balanced portfolio of shares and bonds you are exposed to the stock markets variations.
You can sell when you want and have the money within days.
You can sell any amount up to the total of your investment.

With a BTL you are exposed to property prices and also to tenants not paying.
You are able to sell but could be many months before you get any money
You can only sell the whole property. Not much use if you need to raise £10k.

You can get around 4% income from an income portfolio without the hassle of managing tenants. I know which I would choose.

(I do have BTL but that is only part of my investment and I am prepared to manage things myself)

Archergirl

Thank you all for your advise, she went to a BTL seminar yesterday and after hearing about capital gains, and deposit protections things and tax on this and that she has decided against it.
I think if you are younger (she is in her late 50's) and building up money for later life it may be a good idea, but not now.
Thanks again for your help x